The Market Report: Unilever is back in favour with the City
Love it or hate it? With Marmite-owner Unilever, the Square Mile has done both this week. After investors had lost their appetite for the consumer goods giant thanks to profit warnings from Danone and Procter & Gamble (P&G), yesterday they were finding it rather more to their taste.
The alerts from Unilever's rivals, on Tuesday and Wednesday respectively, had pushed its share price down amid fears over a slowdown in demand. Last night, however, the Anglo-Dutch group climbed 18p to 2,080p, despite the Footsie moving the other way, as City types claimed the woes of its peers could actually be a bullish signal.
Pablo Zuanic, an analyst at Liberum Capital, claimed P&G's profit warning supported the idea that Unilever is not only taking market share in the US but also seeing faster growth globally.
In addition, he said the issues of P&G (whose brands include Duracell and Gillette) were "mostly company specific" and added that the situation was an opportunity to snap up Unilever's shares.
Another giving the group a helping hand was Investec's Martin Deboo. Although he said the news showed "consumer staples are not immune from the forces of gravity", the scribe added that "Unilever is a company ... gaining momentum rather than losing it".
At the same time, fellow consumer goods group Reckitt Benckiser – home to Cillit Bang and Nurofen – was also showing bouncebackability after being hit by the profit warnings, charging up 52p to 3,419p.
The FTSE 100 failed to extend its winning streak to a fifth session, instead dipping 55.93 points to 5,566.36 in the wake of the US Fed deciding late on Wednesday not to restart quantitative easing 3 while also cutting growth forecasts for the States.
Disappointing economic data from Germany and China didn't help, with news from the latter particularly bad for the heavyweight miners – Anglo American was the worst of the bunch after being knocked back 114p to 2,101p.
Meanwhile, commodities trading giant Glencore set a new, all-time low by dropping 10.6p to 322.65p following the Association of British Insurers' attack on the payouts included in the proposed merger deal with Anglo-Swiss digger Xstrata, 31.1p lower at 839p.
Elsewhere, Royal Bank of Scotland and Barclays dipped 4.3p to 243.3p and 3.45p to 202.3p as the market braced itself for expected downgrades late last night from ratings agency Moody's.
After its shares added more than a quarter on Wednesday, Invensys' announcement that takeover talks had taken placed with potential suitor Emerson but had ended meant the engineer slumped 37p to 220p on the FTSE 250.
The fall left a number of burnt fingers in its wake, although there were plenty believing the long-running bid speculation around the group would continue with analysts at Singer Capital saying they see "strategic buyers for each of group's divisions".
Aquarius Platinum was another crashing down to earth. The platinum producer was pegged back 6.5p to 53.2p on the news it is suspending work at its Everest mine in South Africa, little more than a week after it did the same at its Marikana site.
With its Blue Ridge mine also being closed last year, it now means that Aquarius has just two open.
Platinum prices have dived while operating costs have soared, prompting analysts to calculate that at Everest the company was losing roughly £270 for every ounce produced.
Takeover talk was continuing to swirl around Drax. The power station group was the subject of revived rumours last week that British Gas-owner Centrica, down 4.8p to 310.3p, could be considering a possible move, and yesterday HSBC's analysts claimed it "will become an increasingly attractive asset", although this didn't stop Drax sliding 2p to 560p.
Meanwhile, the optimistic run-up to Dixons Retail's final results proved well-founded. The high street chain managed an underlying profit for the year of £70.8m, ahead of guidance, as it advanced another 1.19p to 17.19p.
It may not be the height of romance, but – according to figures highlighted by Numis Securities' Ivor Jones – Cupid's risqué dating site, BeNaughty.com, has had a storming 2012. The analyst reiterated his "buy" recommendation as a result, pointing out that similar sites in France and Germany have also gained in popularity. Cupid still slipped 0.5p to 191.5p on Aim.
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